The FCA has updated its webpage on money laundering to include a statement on derisking and its expectations on banks’ management of money laundering risk.

The FCA states that it is aware that, due to legal and regulatory obligations in the UK and abroad, some banks are no longer offering financial services to entire categories of customers that they associate with higher money-laundering risk, such as money transmitters, charities and FinTech companies, as well as withdrawing from providing correspondent banking services.

The FCA states that where a bank does not believe that it can manage the money-laundering risk associated with a business relationship effectively, it should not enter into, or maintain, that business relationship. However, the FCA adds that the risk based approach does not require banks to deal generically with whole categories of customers or potential customers: instead the FCA expects banks to recognise that the risks associated with different individual business relationships within a single broad category varies, and to manage that risk appropriately.

The FCA adds that it will now consider during its anti-money laundering work whether firms’ derisking strategies give rise to consumer protection and/or competition issues.

View Derisking: Banks’ management of money-laundering risk – FCA expectations, 27 April 2015